The Middle East gluten-free market is nascent but brimming with potential thanks to a young and wealthy consumer base increasingly interested in health and wellness, market experts say.
In 2013, the Middle East’s gluten-free market was valued at $13.6m, and is forecast to grow to $18.1m by 2018, according to Euromonitor International. In 2008, the market was valued at $2m and predominantly made up of baby food. Bread, biscuits and pasta were the largest segments last year.
Within the Middle East region, Israel was the largest market in 2013, totting up sales of $5.5m. United Arab Emirates and Egypt were two other markets where gluten-free had gained significant traction.
‘Entering the market isn’t high-risk’
However, Chris Brockman, senior food and drink analyst at Mintel, said that the gluten-free market in the Middle East was about four to five years behind Europe in terms of penetration and product development.
He told BakeryandSnacks.com the concept of gluten-free in the region was “behind the curve compared to Europe, and way behind the curve in the US”.
Mintel data indicated that one in ten breads launched in the Middle East and North Africa last year was gluten-free. For 2013 food and beverage new product launches in the Middle East (and Africa), 4% held gluten-free claims. This compared to 8% in Europe and 17% in North America.
Despite this, Brockman said the market was developing upwards and would be a natural extension of the European market for gluten-free bakery manufacturers.
'The Middle East offers new opportunities with less competition,' says Chris Brockman, Mintel
“Given the development of the region as a whole, and the development of the bakery market, I wouldn’t say entering the market is high-risk… Bigger brands going in would probably see some good returns initially,” he said.
The Middle East offers new opportunities with less competition, he added.
Diana Cowland, senior research analyst for Health & Wellness at Euromonitor International, agreed that while gluten-free in the region remained specialized and underdeveloped it had great potential, particularly for bakery.
“There’s a larger target audience for bakery. So, opening up these products through wider distribution and greater product variety and offering them at a competitive price is really where the opportunities lie as consumers become more health conscious,” she said.
The target? Expats, young and educated and the wealthy
Cowland said that future gluten-free bakery growth would be fueled by local consumers with higher income and better health education along with expats.
“Short term, international companies should target the younger consumer, so maybe those in their early 30s but they should also build education and awareness with marketing and advertising strategies on the products,” she said.
She said opportunities were strong given that the Middle East had a far younger population compared to Europe and North America.
Brockman added that in particular, the Gulf States had a very young population.
Health & wellness will underpin gluten-free growth
Israel was the biggest gluten-free market in 2013, Cowland said, because of the level of consumer education there. “While 80% of the population in the UAE are expats, health education is higher in Israel.”
However, she said that while there was growing health knowledge across the Middle East, consumers weren’t reacting until into their 30s.
“This is one gap that is perhaps why gluten-free isn’t growing as fast. Consumers are aware of it, but they’re not actively changing their diet for a few years. I think it’s just they don’t feel they need to. In your 20s you’re still very much care-free and you don’t have the same long-term health thoughts you may have five or six years later.”
Brockman said that health and wellness focus was building in the Middle East.
“Interest in healthy eating and health and wellness issues, which gluten-free touches on, is growing significantly because it’s a region with a massive obesity issue looming.”
Saudi Arabia, Kuwait and Qatar had some of the worst obesity rates in the world, he said.
“Gluten-free isn’t going to solve that issue of obesity, but with a greater emphasis on health and wellness, gluten-free certainly plays a part.”
Bakery and gluten-free fit western ‘trendy’
Brockman said the future success of gluten-free also aligned with a wider trend where Western bakery chains like Paul, Magnolia Bakery and Dunkin’ Donuts had aggressively expanded over the past few years.
“The Middle East is proving quite a good market for trendy, food service bakery outlets or high quality bakery specialists. That’s certainly catering to tourism and the expat market, but also locals too,” he said.
“The adoption of Western-style bakery products is quite a prevalent trend.”